The marijuana stock market is heating up and we have seen several companies report significant developments this week.
Today, we want to highlight five stories that we believe investors need to be aware of and watching.
Aurora Cannabis: A Stock to Watch Ahead of Earnings
So far, the market has seen Canadian licensed medical cannabis producers report strong first quarter earnings and many investors are waiting to hear how Aurora Cannabis (ACB.TO) (ACBFF) performed during the period.
We are favorable on Aurora Cannabis ahead of earnings and view the company as one of the best long-term cannabis investment opportunities. The company is the second largest licensed producer in Canada and they also have a significant presence in Germany and Australia.
The Canadian cannabis industry continues to lead the global cannabis movement and we believe that investors can find several high-quality long-term investment opportunities within this sector. With Aurora Cannabis being one of the leading Canadian cannabis producers, this is a stock that every investor should watch.
Aphria: Invests $11.5 Million in a Biotech Cannabis Firm
Yesterday, Aphria Inc. (APH.TO) (APHQF) doubled down on its relationship with Scientus Pharma and announced an $11.5 million investment through a senior, secured convertible debenture.
Scientus Pharma, a vertically-integrated biopharmaceutical company, is focused on producing a pharmaceutical-grade product by leveraging its proprietary, patent-pending formulation and processing technologies. Scientus Pharma is focused on producing a product that meets the pharmaceutical standards in manufacturing, formulations and dosing.
In July, Aphria entered a wholesale supply agreement with Scientus Pharma through its subsidiary, Pure Natures Wellness. Under the agreement, Scientus Pharma can access clean and safe cannabis and Aphria will benefit from guaranteed product distribution. Aphria committed to suppling Scientus over 25,000 fully grown medical cannabis plants over the next 12 months, with the first delivery occurring in the middle of the second quarter of 2018. Aphria expects to generate over $1.2 million in revenue from the wholesale supply agreement in each full quarter of shipments.
Shares of Aphria have come off its August highs and we continue to view the licensed producers as one of the top players in Canada. We are favorable on this development and will continue to monitor how this relationship evolves.
Zynerba: Drops on Negative Top-Line Data
Zynerba is focused on developing cannabis-based treatments that are delivered through the skin and we believe this is proving not to be the most effective delivery method. Following this miss, two broker-dealers (Oppenheimer and Jeffries) downgraded Zynerba from Buy to Hold.
The market has seemed to have soured on Zynerba following these two reports and we continue to view GW Pharmaceuticals (GWPH) as the top biotech cannabis investment opportunity. While we are cautious with Zynerba, we will keep an eye on how the shares trade from here.
American Cannabis: Secures a California Client
Yesterday, American Cannabis Company (AMMJ) edged lower after it reported to have secured a client in California that is looking to acquire a license to let them dispense medical cannabis to patients.
American Cannabis was contracted to complete operational planning activities, to provide conceptual design work for a retail dispensary location, to assist with 2017 city permitting, and to help with 2018 state application completion. Upon the client being awarded a city permit, they will be retained in the dispensary deployment process where they will provide facility staffing solutions, a customized set of operational workflow procedures, and remote operational monitoring support.
We continue to monitor American Cannabis as the company has rallied almost 100% off its July lows. Although this rally is significant, AMMJ is still trading well below its 52-week high. We continue monitor trading activity and will keep an eye on how the shares move from here.
credit:420intel.com
